You have probably heard of the Epic vs. Apple lawsuit. If you haven’t, check out a good summary here
. Essentially Epic (the company behind Fortnite) sued Apple over its 30% fee on all in-app purchases through the app store, the so-called “Apple Tax”. The ruling did not mean much in the end, other than that apps are now allowed to “refer users to external payment alternatives”. For example, a newspaper can now direct you towards their website instead where they keep 100% of the proceeds (and could therefore offer you a discount).
After the main ruling, however, legislators intervened, most notably in South Korea and The Netherlands. The Dutch Authority on Consumers and Markets (ACM) ruled that Apple should allow dating apps (I know, strangely specific) to offer alternative in-app payments (next to the Apple one).
Apple’s reaction: it “generously” reduced the Apple Tax by 3% for dating apps that are not using Apple’s payment option. To be clear: Apple takes 27% of a transaction that it has essentially nothing to do with, other than that it offers the hardware and software the app runs on.
Here are my two cents:
- We need to have a larger discussion about how platforms make money, and if users should be free to install apps outside of the designated app stores (on devices they own).
- Taking Windows as an example, Microsoft levies a 30% tax on the Microsoft Store as well, but Windows obviously allows you to install applications from anywhere.
- Android allows the same. Even though it is a bit harder for an average user, you can still install apps from anywhere and these can offer their own payment providers without a “Google Tax”. For Android apps installed through the Play Store, the fee is 15% on the first $1M of earnings.
- Apple is, in my opinion, abusing its control of the platform to make money from app creators who do not have an outside option (other than to not create the app for iOS). It essentially behaves like a monopolist. Stores with a 30% fee on all other platforms are “convenient” alternatives that can always be bypassed and have at least some competition (Valve’s Steam for video games for example).